WENATCHEE, Wash. — Apples, pears and cherries are not included in China’s latest round of retaliatory tariffs and apparently few U.S. agricultural products are.
Of 2,493 items on the list, most are either minor processed foods and beverages or industrial items, said Desmond O’Rourke, retired Washington State University agricultural economist and world apple analyst.
“This round is adding stuff not on prior lists so most of it is not agricultural,” O’Rourke said. “The first two rounds were more agricultural as China was hoping to hit President Trump in his voting base.”
Mark Powers, president of Northwest Horticultural Council in Yakima, Wash., said apples, pears and cherries were not on the list. He said the previous tariff remains in place of 40% on top of a 10% Most Favored Nation tariff rate, for a total of 50% on apples, pears and cherries.
He said he has no revision of his estimate last year that the tariffs would cost the Northwest about $129 million in lost apple sales to Mexico, China and India.
O’Rourke has said that estimate is soft because it doesn’t account for sales shifting to other markets.
With the U.S. and China appearing close to a trade deal a couple of weeks ago, Northwest Cherry Growers in Yakima was hopeful tariffs would dissolve before Washington cherry harvest begins about June 15.
With the 50% tariff continuing, it will be very hard for China to take much volume, O’Rourke said.
A 20-pound box of cherries at $60 wholesale becomes $70 with freight to China and with a 50% tariff becomes $105, he said. Chinese importers and consumers won’t be eager to pay that, he said.
But three weeks ago, B.J. Thurlby, president of Northwest Cherry Growers, said importers in China were ready to buy. A good year might be 1 million boxes sold to China versus 1.4 million last year and 3 million two years ago, he said.
His first estimate of the 2019 Northwest cherry crop, released May 14, is 24.9 million boxes compared to last year’s 25.3 million and the record of 26.4 million in 2017.
“One of Trump’s complaints is that the trade balance is so unfavorable to us, that we buy $400 billion more from them than they buy from us,” O’Rourke said. “Most economists say the balance per country isn’t as important as the overall global balance.”
The bigger problem is national security, O’Rourke said. China’s theft of intellectual property and subsidies of its companies are unfair and Trump wants evidence they will change, he said.
“China wants to replace us as the dominant world economy and world power and is being very aggressive around the world with their investments,” he said. “They own four major ports in southern Europe. They’re building a new port in Pakistan and putting money into Latin America, Africa and Italy.”
China has retaliated with a lesser tariff bite than the U.S. because it wants to appear more reasonable than Trump to the rest of the world, he said.
“I see China as the biggest challenge to the western world since the rise of Hitler. In order to defeat Hitler we had to have allies around the world,” O’Rourke said. “Trump has the courage to take on this issue. But he has built a reputation as being erratic as he goes it alone. We look a little petulant. Instead of picking fights with our natural allies, he could organize a worldwide boycott on China.”